This Week’s Cost Intelligence
We developed the Stonehaven Cost Index (SCI) to give project teams a clear, dependable snapshot of how construction costs are moving week by week.
This GCC construction cost index continues to highlight shifting construction material prices, FX movements, and freight trends impacting project costs across the UAE and Saudi Arabia. This week’s update (17 March 2026) reflects ongoing volatility in global supply chains, rising alongside fluctuating logistics costs and currency pressures.
For developers, contractors and cost managers, the Stonehaven Cost Index provides a view of construction cost trends in the Middle East, helping project teams make informed decisions in an increasingly volatile market.
Key Takeaways For Your Projects This Week
Stonehaven Cost Index (SCI)
Index baseline (01 September 2025) = 100
Current SCI: 109.95 (increase from 109.25 on 10th Mar)
WoW change: ▲0.64%
Change from baseline: ▲9.95%
Driver Note
Geopolitical tensions in the Middle East have added volatility to energy markets and freight routes, leading to upward pressure on fuel related costs and logistics, influencing the index movement. Overall, construction cost pressures remain material specific, rather than broad based.
The graph below shows the variation in the average SCI in relation to the average prices of the most affected construction materials during the past month.
Material Movement This Week
*Rates as of 17th March 2025 - 17th March 2026
To view the price fluctuations in detail, please download our latest dataset below.
Currency & Inflation Lens
AED vs Key Trading Currencies
*Rates as of 17th March 2026
SAR vs Key Trading Currencies
*Rates as of 17th March 2026
Stonehaven Analysis
During the current period, the Euro (EUR), British Pound (GBP), Japanese Yen (JPY), Chinese Yuan (CNY), and Singapore Dollar (SGD) have all shown signs of weakness, with each of these currencies weakening against both the AED and SAR.
On the other hand, the Indian Rupee (INR) has demonstrated some strength, appreciating slightly against both the AED and SAR. The Australian Dollar (AUD) has remained stable, showing little to no change in its value relative to both currencies.
These fluctuations reflect the ongoing global economic conditions and regional market dynamics, affecting the exchange rates for these major currencies.
Impact On Construction Costs
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Increased Material Costs for Imported Goods
The weakening of the Euro, British Pound, Japanese Yen, Chinese Yuan, and Singapore Dollar means that imported materials from Europe, Japan, China, and Singapore will become more expensive when purchased with AED or SAR, leading to higher procurement costs and potentially increased project budgets or delays. -
Impact on Labor Costs for Foreign Workers
The appreciation of the Indian Rupee (INR) against the AED and SAR could lead to higher wages for foreign workers from India, increasing labor costs and potentially raising the overall costs of labor intensive construction projects. -
Currency Hedging and Contract Adjustments
Fluctuations in exchange rates may require construction firms to adopt currency hedging strategies and adjust contracts to include currency fluctuation clauses, adding financial risk and potentially increasing overall project costs.
Global Inputs & Freight Benchmarks
Logistics & Freight – Construction Cost Multipliers
*Rates as of 17th March 2026
How Are Shipping Indices Impact the Construction Industry due to Middle East Conflicts?
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Material Costs
Conflicts in the Middle East, particularly disruptions in key shipping routes, have led to fluctuations in shipping indices causing increased transportation costs and higher material prices, which impact construction project budgets. -
Shipping Routes and Delays
Critical shipping lanes like the Suez Canal and the Strait of Hormuz, can cause disruptions such as delays, rerouted ships, and higher insurance premiums, directly impacting lead times for construction materials and potentially delaying project completion dates. -
Increased Freight and Insurance Costs
Drive up fuel prices and shipping insurance premiums, causing shipping companies to charge higher rates or opt for longer, safer routes, which is reflected in the Global Container Freight Index, leading to increased costs for construction materials and equipment, thereby raising project expenses. -
Supply Chain Disruptions
Causing delays and material shortages, which are reflected in shipping indices leading to increased procurement costs and significant delays for construction projects reliant on these critical lanes. -
Impact on Bulk Commodities
Ongoing conflicts in the Middle East have led to rising oil prices and shipping disruptions, causing increased shipping rates for bulk materials like steel, coal, and iron ore, which directly impact construction costs, budgets, and project timelines. -
Impact on Fuel Prices and Energy Costs
Rise in oil prices due to regional instability or disruptions in the oil supply chain directly impacts shipping rates. Since the shipping industry is highly dependent on fuel, an increase in fuel costs will raise the overall cost of transporting goods, including construction materials.
Market Forecast & Watchlist
Bitumen: Strong Uptrend (▲)
Forecast : Rising demand for bitumen due to increased construction activity, particularly in road and infrastructure projects, may continue to push prices upward.
Watchlist : Energy prices, global infrastructure development, supply constraints in key production regions.
Titanium – Flat (→)
Forecast : Titanium prices are expected to stabilize with balanced supply and demand. Limited market movement is anticipated in the short term.
Watchlist : Aerospace sector demand, industrial manufacturing activity, and production output from key suppliers.
Aluminum– Softening (▼)
Forecast : Aluminum prices may soften due to moderate global demand and adjustments in supply chains, particularly as production ramp ups take place.
Watchlist : Construction sector demand, transportation industry needs, Chinese production levels, and the impact of energy costs on production.
Recommendations for Material Purchasing
Stonehaven Procurement Strategy Index (SPSI)
The Stonehaven Procurement Strategy Index (SPSI) represents the overall procurement risk in the construction market based on three key exposure factors: Market Volatility (MVEI), Import & Currency (ICEI), and Energy & Logistics (ELEI).
Each index is measured on a scale from 1 (Low) to 4 (High) and combined using weightage of 45% (MVEI), 30% (ICEI), and 25% (ELEI) to reflect their relative impact on construction cost and procurement conditions. As of 17-Mar, the SPSI is 2.25, which falls at the upper limit of the Mild Risk range, indicating minor market volatility with the need to monitor pricing before procurement commitments.
For this date, the individual indices show:
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MVEI = 2 → mild material price volatility, with moderate movement in key construction commodities
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ICEI = 2 → mild currency and import exposure, indicating some FX movement affecting imported materials
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ELEI = 3 → moderate energy and logistics exposure, reflecting higher freight and fuel cost risk
Commercial Guidance
1. Structural & Steel Packages
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Key Materials: Steel (LME/SHFE), HRC, CRC, zinc, aluminium
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Position: Steel has increased, while HRC and CRC also show minor gains. Zinc has decreased, which may influence galvanized component costs.
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Action: Steel prices are seeing a slight rise, but given the decline in zinc, contractors should avoid blanket escalations across structural packages and focus on specific cost increases, especially in galvanized and aluminum intensive facade systems. Use the stability in HRC prices to negotiate favorable terms.
2. MEP & Polymer Based Systems
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Key Materials: Polyvinyl (PVC), copper, nickel, lead
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Position: Polyvinyl shows a significant rise, indicating strong demand in piping and insulation systems. Nickel, Lead and Copper have seen a modest decline.
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Action: Closely monitor PVC linked systems, particularly for drainage, piping, and insulation. Given the strong momentum in PVC, consider securing procurement ahead of potential further price increases. No immediate adjustments needed for copper or nickel based systems.
3. Energy & Logistics Exposure
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Key Inputs: Bitumen, fuel linked freight indices
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Position: Bitumen has seen a sharp increase, reflecting rising energy related costs. This increase is likely to affect logistics heavy materials as well.
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Action: Adjust procurement strategies for bitumen and fuel dependent materials. Maintain competitive assumptions for logistics heavy packages, as freight cost pressures may persist due to energy price fluctuations. No immediate freight contingency uplift required unless sustained increases are observed.
Overall Market Position
Construction cost pressures remain material specific, with materials like bitumen, polyvinyl, and steel showing upward trends, while zinc and platinum decline. Energy linked materials are rising, requiring proactive procurement strategies. Freight indices have eased, reducing logistics inflation risks, but energy and polymer costs remain crucial. The steel sector is stable, but fluctuating zinc prices may impact galvanized applications. Contractors should focus on securing materials with significant price rises and negotiate stable costs.
Important Disclaimer
The Stonehaven Cost Index (SCI) is provided for general information only and does not constitute a commitment, guarantee, or offer to contract at any price level. The index is based on publicly available commodity data and internal market assessments as at 17 March 2026. Actual project costs will depend on project-specific scopes, procurement routes, and commercial negotiations.
Stonehaven Project Management Services LLC accepts no liability for any loss arising from reliance on this document without appropriate project-specific advice. The index reflects indicative market movements based on weighted construction inputs and does not represent a forecast, tender price, or contractual valuation.
FAQ's
1. What is the Stonehaven Construction Cost Index and how is it calculated?
The GCC construction cost index measures changes in construction material prices, labour costs, freight rates and currency movements across the UAE and Saudi Arabia. It is calculated using a weighted baseline of key materials such as steel, bitumen, copper and more combined with logistics and FX data.
2. What affects construction material prices in the Middle East?
Several factors influence construction material prices in the Middle East, including global commodity markets, shipping costs, fuel prices and currency movements. Materials like steel, copper and bitumen are particularly sensitive to international demand and logistics conditions, which directly impact construction cost trends in the GCC.
3. How often do construction material prices change?
Construction material prices can change daily depending on global market conditions. Factors such as commodity prices, shipping costs and fuel rates influence short-term movements, which is why tracking weekly construction material price updates is important for sensitive cost planning.
4. How is the Stonehaven Construction Cost Index prepared?
The construction cost index is prepared using weekly data collection across key materials, currencies and freight rates. Cost managers monitor these movements to reflect current conditions. This is then reviewed by the commercial management alongside foreign exchange and logistics trends, which influence construction pricing across the GCC before presenting to our readers.
Talk To Our Team
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